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Tax Burden in EU
Algirdas Šemeta, the European Commissioner responsible for Taxation and Customs Union, Audit and Anti-Fraud has announced in a speech that there are ten nations in the EU that need to cut the tax burden on labor if they are going to aid the growth of the European Union. They are hindering investment and holding back output of firms across the EU, although he admits that it is not reducing the tax burden alone that will solve the problems of the economic crisis.
This, however, is nothing new since the OECD had already stated back in March that the average tax burden on employment incomes had increased for OECD countries by 0.1% to 35.6% in 2012. Last year saw an increase of the tax burden on labor for 19 of the 34 countries in the OECD. It was only reduced in 14, and remained exactly the same in just 1 country. The highest tax increases were in the Netherlands, Poland and the Slovak Republic. This was due to increases in tax rates as well as increases in employer social security contributions. Spain and Austria also saw increases in their labor tax burden (due to increases in income tax there). 2011 saw an average increase in the tax burden for OECD countries of 0.5%. However, there was a decline between 2007 and 2010 from 36.1 to 35%.
The figures are revealing key factors in whether or not employers are prepared to hire new people or not. It also reveals something about to what extent people seek employment. With current unemployment figures across the EU higher than in the past, the European Commissioner for Taxation is clearly telling the EU to reduce the tax burden on labor to try to boost growth and encourage hiring. Will they listen to him?
In the EU, Belgium has the highest average tax burden for single, childless workers (56%). The Belgians are way ahead of the others in the rate of taxation on single workers. The Belgians are followed by France (50.2%). Germany has a rate of 49.7%. However, the stark similarity between these last two countries in terms of their tax burden and yet their apparent differences in terms of growth prospects and economic activity or current unemployment rates seems to point to the fact that Commissioner Šemeta’s advice might appear to be good, but it won’t have the effect that he believes it will. Reducing the tax burden on labor may have some effect on hiring and job seekers, but it is not going to solve the problem of the economic recession in a country like France. However, France does have the highest tax burden on labor income in the OECD (43.1%) for single earners (with two children). Greece comes in 2nd position with a rate of 43% and closely followed by Belgium at 41.1%.
The European Commissioner looks like he will have a tough time ahead of him however, as few countries in the EU actually want a coordinated taxation policy. There is a serious rate of distortion between member states of the EU leading to competition between countries. Harmonization of regulations doesn’t look like it is set to happen in the near future. Each EU member country wants to control their own tax burden in such a way as to allow them some room for manoeuvre in the economic climate that needs to be adapted to in a specific and very individual way. Tax burden in the EU is already higher in comparison with other OECD countries such as the USA. As a percentage of GDP, tax burden in the USA is roughly 25%. In Australia it is 26% and in Japan 28%. Denmark has the highest EU tax burden as a percentage of GDP (48%).
Certainly however, the European Commissioner’s comments will come at a welcome time when we are hearing little else but the tax evasion of the rich and famous, flouting their civic duties of paying tax, Swiss bank accounts and tax haven’s as well as companies that are using either the double Irish or the Dutch or Luxemburg Sandwiches (such as Google).
See our previous article on Google and tax avoidance: http://www.tothetick.com/google-its-just-not-cricket
Originally posted http://www.tothetick.com/tax-burden-in-eu
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Here in Holland we basically pay 50% tax on our income, when we spend it we pay 21% vat to start with, (real tax 60.5%) and than all other back door theft tricks taxes like, real estate tax, energie tax, CO2 tax (20 - 40%) , cradle to cradle tax (1 %), government radio and TV tax (fat payed communists), copy tax, insurance tax, death tax, green tax, wage tax, corporation (Corporation Tax); dividend tax; gambling taxes; grant tax; wealth tax, sales tax (VAT); Import duties; export duties; taxes on alcohol, tabacco and fuel (15-50%!) and consumption tax on soft drinks; taxes on cars and motorcycles (bpm); circulation (MRI); heavy motor vehicle tax; transfer tax; insurance tax; environmental taxes like Coaltax, and energy taxes, dogs and cats tax, litter tax, and there is much more. Basically you are a slave to the fucking communist system, more and more people are trying to free themselfs from this insane threadmill and work outside this crazy and in my opinion doomed system. Since we have the EU (30000 servants in Bruxelles earnig over 100000 Euro net excluding pensions and secundairy benefits) and the Euro it all seems to get worse and worse, now even by the day, politicians are lying, some of them are more than corrupt (selling info to investors and big multi nationals), de civil system (from medicare tot education, from nationlized bank and city governemenr) is killing Jack the Plumber up here, I tell you, I start understanding now how the Russians must have felt during communism! I am still surpised it is so quiet up here, but most of the people don't give a shit, "money for nothing and cheques for free" or they are workingf for the system or have some kind of social care benefit similar to the nett income of Jack the Plumber and his working wife 80 hours a week. Sorry for my poor english guys..., I hope the message is clear though...
This just reminds me that I can't remmber any Dutch political campaign centered on reducing taxes... perhaps I've missed it
I found it clear, btw
The people who are the real nett payers to the system are held political hostage by the fast growing welfare army and the civil servants working for the (semi) government, soon there will be no nett payers left and the 'solidary' system will go bust, Holland has an army of moral superior civil servants with high income, the people who pay all the bills are just scum or populists in their opinion, we could use a politicl party for Jack the Plumber as the (low tax) Liberals has overtaken the socialists on the left side, they will loose badly on the next coming elections, as they bullshitted all their voters before the elections with anti EU promises, till today they signed lerally everything what came from Bruxelles, the people feel betrayed big time, this will blow up badly in the liberal EU technocrats face next EU election April 14, now they are shopping with different left wing political parties to implement shit laws to prevent down to earth (Grillo) parties to take controll, it is really a mad houde here, most people lost confidence in all these liars.
Heck, in the ussa, taxes are only collected to pay for the endless wars of aggression and world domination of all resources. Oh, and that money-god thing called the crashing dollar.
Here is Ben Swan in a reality check that would seem to be a greater priority because this is where the tax dollars from the Eu and the ussa are going to. Maybe the peoples of the us and eu should just send their monies directly to the al-cia-duh mercenaries c/o Syria, instead of to the middle (tax) man.
http://xrepublic.tv/node/3469
WTF. Move here and we will take 56% of your income. HA!
My son in law moved from Scotland to Houston for the same reason. Hell of a raise.